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Financial Planning > Behavioral Finance

What Is A Financial Institution?

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The Financial Crimes Enforcement Network says an insurance company is not always a “financial institution” for purposes of applying currency transaction report rules.

The federal Bank Secrecy Act requires a financial institution to file a CTR for “each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution which involves a transaction in currency of more than $10,000.”

The rules implementing that requirement define insurance companies as financial institutions, a FinCen official writes in FinCen ruling FIN-2008-R013, which was posted on the agency’s website earlier this week.

But affected entities do not have to file CTRs when the party conducting the transaction is an “exempt person.”

Under that definition, an “exempt person” cannot be a “financial institution,” but the definition of financial institution used in that instance excludes insurance companies, the official writes.


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